Builders welcome regulatory bill, call provision of jail harsh

The new law would boost home buyer confidence as well as investment in the realty sector, but the government should ensure the regulator does not become another layer of bureaucracyPTI | March 11, 2016, 07:22 IST

NEW DELHI: Realty developers and consultants today hailed the passage of the regulatory bill in Rajya Sabha, saying the law will bring credibility to property business and protect consumers interest but felt that some of the provisions like imprisonment are harsh.

The developers expressed dissatisfaction over inclusion of the ongoing projects in the Real Estate (Regulation and Development) Bill. They wanted government authorities, which sanctions the project, to be brought under this bill.

The new law would boost home buyer confidence as well as investment in the realty sector, they said, but added the government should ensure the regulator does not become another layer of bureaucracy.

"Everyone welcomes the bill. We respect the wisdom of Parliament. There are some provisions like imprisonment which are harsh and may be passage with the time they will be set right," DLF Chief Executive Rajeev Talwar told .

He also questioned why the government authorities have not been included in the bill.

Realtors' apex body CREDAI President Getamber Anand said the bill would "bring credibility to real estate business and endorse our demand of giving infra status to housing".

He, however, said the bringing ongoing projects under this bill would lead to stoppage of work on the site in order to ensure compliances.

CBRE South Asia CMD Anshuman Magazine said: "The Bill will have a far reaching implication for the sector. It will help regulate the sector and promote transparency. If implemented in the right spirit, it could facilitate greater volumes of domestic and foreign investment flows into the sector. Home buyer confidence in property market is also likely to revive."

Rajya Sabha MP Rajeev Chandrasekhar, who was member of the select panel that examined the bill, said "by creating a much needed regulator for the sector... this government has initiated the crucial first step to protect consumers from the prevalent opaque and fraudulent practices that have so far characterized this sector in India."

Godrej Properties MD and CEO Pirojsha Godrej told : "The regulation will be in the interest of all concerned over the medium term, but in the short term could create significant transition issues."

"I hope the government does its best to ensure this transition is handled well and that the regulator doesn't become another layer of bureaucracy. This must also be accompanied by strong measures to improve the ease of doing business in the sector," he added.

JLL Chairman and Country Head Anuj Puri termed the passage of the bill as "unequivocal victory" for Indian realty sector.

"Its enactment as a law will almost single-handedly revamp the way this sector works across the board, from developers to end-users and investors, to lending institutions and government agencies involved in the buying and selling of property," he added.

Currently, the Goods and Services Tax (GST) is levied at 12 per cent on payments made for under-construction property or ready-to-move-in flats where completion certificate has not been issued at the time of sale.